How Singles’ Day’s little brother packs new-retail punch

Double 12, which is named after the date on which it falls—Dec. 12—is yet another online shopping festival created by Chinese e-commerce giant Alibaba.

In contrast to its bigger brother, Double 11, which is more targeted on promotions for big brands on Alibaba’s Tmall, Double 12 looks to promote small and medium businesses on the Taobao marketplace.

This year, we saw various initiatives on Taobao, including express delivery times of just two hours in major Chinese cities; celebrity participation on its live-streaming platform; and a Double 12-themed variety show.

Taobao also offered customers sizable discounts for just one hour, between midnight and 1 a.m. on Dec. 12, with discounts of as much as 70% on certain goods.

Other e-commerce players, including JD.com and Pinduoduo, have also joined in, holding their own Double 12 promotions.

According to Chinese media company Ebrun, more than 100 million customers bought during the shopping promotion, with each ordering more than 15 items on average.

Companies did not release sales data for the Double 12 event this year—nor have they released data for most of the previous years. However, we believe sales volumes for Double 12 were dwarfed by the Double 11 Singles’ Day results.

State Post Bureau data offers some hints as to how the two compared. Postal and express delivery firms delivered 322 million pieces of fast mail during the Double 12 sales period, an increase of around 33% year over year and a record high for the period. That said, those same companies delivered a whopping 1.8 billion pieces of fast mail during the Double 11 festival.

Given the timing of Double 12, coming just one month after consumers binge bought on Double 11 and close to Christmas and New Year promotions, shoppers likely spent heavily already so their appetite for more goods—even at discount—was weak. Those who do still have an appetite to buy may be waiting for bargains in the coming weeks.

Double 12 beats Double 11

There were a few areas in which Double 12 beat out Double 11. This year, Alibaba’s newly formed local service company (the result of a merger of its delivery arm Ele.me and local service platform Koubei) got in on the action. Alibaba also got more brick and mortar outlets involved: The number of offline merchants joining Double 12 increased to 2 million in 2018 from just 20,000 in 2014.

Koubei said it received more than 8 million orders for services such as massage, hair salon and karaoke between midnight and noon on Dec. 12, an increase of around 20% on the same time period during Double 11.

Similarly, Ele.me also saw around 12% growth compared to Singles’ Day. Some merchants offered huge discounts on Ele.me and Koubei, including up to 50% off of food and services, which likely drove these results.

Koubei worked with around 300,000 restaurants to help them improve IT capabilities and online operations, digitalizing every aspect of the restaurant dine-in experience, including connecting the restaurants to the Koubei app so customers can order from the app.

Ele.me introduced a tool so customers could track order progress, including preparation, pick-up, and where the food is while en route.

Ele.me also used machine learning tools in partnership with Ali Cloud to get better information on customers’ eating habits and trends.

Some e-commerce platforms in Southeast Asia, including Lazada (which is now part of Alibaba), Zalora and Shopee, also joined the Double 12 event, with similar promotion strategies across their platforms.

Lazada reported total sales value of goods was seven times that of Double 11 total sales in 2017. (It did not compare to Double 11 in 2018.)

We expect next year’s Double 11 and Double 12 events to continue to grow in scope and size, and to include more digital features targeting customers and logistics.